ST. PAUL, Minn. (AP) — St. Jude Medical Inc. said Wednesday its second-quarter net income slipped 5 percent as the medical device maker took charges tied to a restructuring of its cardiac rhythm management business and an acquisition.
The St. Paul, Minn., maker of pacemakers and artificial heart valves also lowered its 2011 adjusted earnings-per-share forecast 3 cents back to a range it had predicted in January.
St. Jude earned $240.9 million, or 72 cents per share, in the three months that ended July 2. That compares with earnings of $254 million, or 77 cents per share, in the same quarter last year. Adjusted earnings for this year's second quarter, which exclude the charges, amounted to 85 cents per share.
Revenue rose 10 percent to $1.45 billion.
Analysts surveyed by FactSet expected, on average, earnings of 84 cents per share on about $1.45 billion in revenue. Analysts typically exclude one-time items from their estimates.
St. Jude took charges in the second quarter of $10 million, or 3 cents per share, tied to last November's acquisition of AGA Medical Inc. It also recognized charges totaling $32 million, or 10 cents per share, related mainly to restructuring actions taken during the quarter in its cardiac rhythm management business.
Cardiac rhythm management sales, which include pacemaker products, climbed only 1 percent to $793 million, as company officials cited a weakness in the U.S. segment for that business.
Cardiovascular sales, which mainly include vascular and structural heart products, rose 35 percent to $342 million. St. Jude said that division now includes sales from AGA Medical.
On a geographical basis, U.S. sales fell 2 percent, while international sales rose 23 percent and now represent the majority of St. Jude's business.
St. Jude also said its cost of sales before special charges rose 11 percent to $383.8 million. Selling, general and administrative expenses climbed 15 percent to $513.8 million.
The company expects 2011 adjusted earnings of between $3.25 and $3.30 per share, down from an April forecast of $3.28 to $3.33 per share. For the third quarter, it forecasts earnings of between 74 and 76 cents per share.
Analysts expect, on average, earnings of $3.31 per share for 2011 and 80 cents for the third quarter.
St. Jude shares climbed $1.05, or 2.3 percent, to $47.87 in morning trading Wednesday.